Before, the word ‘logistics’ was part of military terminology, but in the present time, it is used in the commercial field. The main goal of logistics companies is to help different businesses and organizations with processes related to the storage and movement of products and services within a supply chain. The transportation of the goods is done from the point of origin to the point of consumption. The supply chain adopted by the logistics company will include transportation, shipping, receiving of goods, and eventually storage.
Today many companies specialize in logistics, offering their services to different manufacturers, retailers, and all types of industries that require such logistic services to transport all kinds of products.
What Are the Types of Logistics Companies?
There are two main types of logistics companies: freight brokers and third-party logistic companies (3PLs). Both types overlap and can be used by the same organization to cater to different needs. Although some may use both terms interchangeably, there are some differences between them.
A freight broker company is basically a mediator between shippers and carriers. It is a non-asset-bearing intermediary that forms a network consisting of thousands of small and medium-sized carriers. With this approach, a freight broker company will provide businesses and organizations with an alternative for larger carriers by providing a wider range of shipping options. Employing this type of logistics company will offer you flexibility.
Unlike freight broker companies, 3PLs are asset-bearing companies. This means that they own and invest in their own fleet, warehouses, and storage facilities. 3PLs may offer single services, but they typically manage whole supply chains or offer a package of services customized to fit their customers’ specific needs.
What Are the Benefits of Hiring a Logistics Company?
While some companies may choose to handle the entire storage, movement, and any other parts of their supply chain logistics, working side by side with a logistics company can be more efficient and save a lot of time and money given they are professional. The benefits of hiring a logistics company can include:
More Affordable Storage Spaces: warehousing is an important factor in the storing process. Finding the right storage space is becoming more complex and expensive. When choosing a logistics company to manage their supply chains, company owners can find affordable spaces while saving time and effort.
Shipping and Transportation: Investing in their own vehicle fleet and hiring drivers would cost companies money and would need immense effort to get the required license and to train the workers. But a logistics company already has its own licensed fleet and trained staff, which means that companies can benefit directly from already established reliable services.
Running the Business More Successfully: Managing a business is more of a challenge. It is almost impossible for a company to cover the professional needs of each department and provide experts in every field of the business. By employing a logistics company, companies can leverage their expertise in running supply chains and be able to allocate their other competencies, time, and resources and focus on other business initiatives.
Facilitate Market Expansions: logistics companies will give businesses the chance to expand to reach new markets, where they don’t even have any physical presence.